A couple of months ago, Taylor (kbs+ Ventures) asked my opinion about AngelList Syndicates. We had a pretty brief conversation and I basically dismissed the idea. I forgot my exact reasoning but I did not pay too much attention.
I love the idea of AngelList though have not invested in a company that I’ve solely met through AngelList but I have contacted a few that I thought were interesting.
As a potential Syndicate investor, I see a potential issue. If I join the Syndicate of someone, say Jason Calacannis, I make the commitment to invest in the rounds he does up until I opt-out of his Syndicate. This means I, as an angel investor, might be committing quite a bit of capital and quickly, depending on the speed at which Jason invests. While I understand my own bank account, my asset mix, and the risks associated, I might have to withdraw out of Syndicates at some point as I don’t have unlimited funds. I imagine the majority of investors on AngelList are doing a few deals, not volumes of deals, such at the pace at which Syndicates could theoretically operate.
So today, on AngelList, the Syndicates look pretty darn powerful because it’s easy to pledge that you’ll invest alongside someone. But a few deals later, will those Syndicates be as powerful with the same amount of investors pledging? (assuming AngelList keeps growing I suspect the answer is yes, but I can see investors pulling out due to constraints).
Just a thought.